I saw this thread on the topic http://groups.google.com/group/satchmo-users/browse_thread/thread/3d73bd695554c9a0/30e9ef3dafefd693?hl=en&lnk=gst&q=fedex+only+ground#30e9ef3dafefd693 I know its old but I am having the same problem. Does the fedex module still only do ground regardless of what you select in livesettings? That is my experience so far.
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